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European automakers gear up for Brazilian production

Brazil is the place to be, apparently. Toyota has been investing in the South American country, as has BMW, which announced a $261 million investment in October 2012, on the heels of an Audi factory announcement in San José Chiapa. The high-end immigration is only set to continue, as Mercedes-Benz and Jaguar-Land Rover have both announced plans to set up manufacturing operations there.
Mercedes is the big news here, as its new facility will see the German manufacturer invest 170-million euros for production of its next-generation C-Class and upcoming GLA-Class. "Brazil is an important future market. With our local production we accept the challenge and take on the competition," noted Andreas Renschler, Management Board member for Production and Procurement at Mercedes-Benz Cars and Mercedes-Benz Vans. Production is expected to begin by 2016.
Jaguar-Land Rover, meanwhile, isn't so concrete in its plans. The news of its investment in South America comes from a job posting for a plant quality manager in Brazil that was picked up by the UK's AutoCar. "Portuguese language skills will be definite advantage" for interested candidates, according to the job listing. The want ad follows on the heels of remarks by Jaguar Land Rover's Dr. Ralph Speth, who said there are "very intensive discussions" with Brazil's government. Unlike Mercedes, there's no mention of which vehicles will be produced in South America, although AutoCar thinks the Freelander, sold in the US as the LR2, is a leading contender.

Foreign automakers pay from $38 to $65 per hour to non-union workers

As leaders for the United Auto Workers gather in Detroit for their Special Convention on Collective Bargaining to work out the negotiating stance for this year's new labor agreements with the Detroit 3 automakers, what they most want to do is figure out how to eliminate the two-tier wage scale. However, the lower Tier 2 wage has allowed the domestic automakers to reduce their labor costs, hire more workers, and compete better with their import competition. As it stands, per-hour labor rates including benefits are $58 at General Motors, $57 at Ford, and $48 at Fiat-Chrysler – a reflection of FCA's much greater number of Tier 2 workers. The Center for Automotive Research released a study of labor rates (including benefits) that put numbers to what the imports pay: Mercedes-Benz pays the most, at an average of $65 per hour, Volkswagen pays the least, at $38 per hour, and BMW is just a hair above that at $39 per hour. Among the Detroit competitors, Honda workers earn an average of $49 per hour, at Toyota it's $48 per hour, Nissan is $42 per hour, and Hyundai-Kia pays $41 per hour. The lower import wages are aided by their greater use of temporary workers compared to the domestics. Automotive News says the ten-dollar gap between those foreign camakers and the domestics turns out to about an extra $250 per car in labor, which adds up quickly when you're pumping out many millions of cars. That $250-per-car number is one that, come negotiating time, the Detroit 3 will want to reduce, as the UAW is trying to raise both Tier 1 and Tier 2 wages. Another wrinkle is that the domestic carmakers are considering the wide adoption of a third wage level lower than Tier 2. Some workers who do minor tasks like assembling parts trays kits and battery packs already make less than Tier 2, but the UAW will be quite wary about cementing yet another wage scale at the bottom of the system while it's trying to fight a bigger battle at the top. News Source: Automotive News - sub. req., BloombergImage Credit: AP Photo/Erik Schelzig Earnings/Financials UAW/Unions BMW Chevrolet Fiat Ford GM Honda Hyundai Kia Mercedes-Benz Nissan Toyota Volkswagen labor wages collective bargaining labor costs

2015 Italian Grand Prix is smoke, mirrors, stalls, and stewards

For the first day-and-a-half of the Italian Formula One Grand Prix weekend, everything went to blueprint: Mercedes in front, Ferrari lurking, everyone else scrambling in their usual orders behind. Then qualifying came, and someone stirred the pot. About the only thing we expected was for Lewis Hamilton to put his Mercedes-AMG Petronas on pole position, the 11th time he's done it this year. He did it with a brand-new specification engine, one that represents not only an evolution in components, but also in power unit philosophy. Kimi Raikkonen lines up in second. It's been a long time since we read those words; the Iceman hasn't been on the first row since the 2013 Chinese Grand Prix, when he put his Lotus second on the grid behind... Lewis Hamilton. Raikkonen lined up just ahead of a Ferrari at that China race, then driven by Fernando Alonso. In Italy this weekend, he lined up in front of the Ferrari driven by his teammate, Sebastian Vettel, who qualified third. Both Ferraris benefitted from an upgraded power unit, ending a front-row drought for the scuderia that goes all the way back to Monaco in 2009 Germany in 2012. Nico Rosberg has a lot of work to do from fourth in the second Mercedes-AMG Petronas. Mercedes discovered a problem with Rosberg's engine but couldn't figure out the cause, so he reverted to the previous-spec engine he used in Belgium, one that's six races old. The lack of power hurt. Williams teammates Felipe Massa and Valtteri Bottas took fifth and sixth, with Massa seemingly given a team-ordered helping hand. Williams told Bottas to tow Massa down the front straight, giving Massa a blistering time in the first sector. Then Bottas did it again, ensuring he would line up behind Massa. The first Sahara Force India of Sergio Perez nabbed seventh, three places ahead of teammate Nico Hulkenberg in tenth, with Romain Grosjean in the Lotus behind Perez in eighth. Marcus Ericsson in the Sauber qualified ninth, but some clumsy driving saw him impede Hulkenberg twice. The stewards penalized Ericsson with a three-place grid penalty and two points on his superlicense, so Hulkenberg inherited ninth and Pastor Maldonado in the second Lotus inherited tenth. We hardly saw Hamilton during the race, because he led from the start, worked up a larger gap to second place on every lap, and didn't give up the lead for the whole event.